Article
Assessing the Factors that Influence Women's Financial Inclusion: Evidence from India (Madhya Pradesh)
Financial inclusion has emerged as a primary policy and research issue due to its potential in triggering economic development, alleviating poverty, and promoting gender equality. Although India’s financial inclusion agenda has made remarkable strides toward financial access and literacy, women’s involvement in the formal financial system remains constrained by various factors, including accessibility, awareness, financial capabilities, and utilisation of services. In addition, prior research on financial inclusion has primarily focused on assessing the overall level of inclusion while neglecting its multidimensionality, particularly in the case of women.
This paper aims to explore the critical dimensions of women’s financial inclusion and assess their impact on financial inclusion using primary data and Exploratory Factor Analysis (EFA). In particular, this study employs a survey questionnaire with 57 items to measure the level of women’s financial inclusion.
The results of the reliability test show that Cronbach’s Alpha is .989, which is an indication of top reliability. Moreover, the KMO test (.906) and Bartlett’s Test of Sphericity (p <0.001) met the required criteria for factor analysis. In this study, EFA revealed nine factors that explained 75.995% of the variance in women’s financial inclusion data. These factors are Socio-Economic Empowerment, Perceived Banking Service Quality, Banking Service Accessibility, Bank Inclusiveness, Socio-Economic Awareness, Personal Financial Capacity, Financial Capability, Insurance and Credit Services, and Rural Banking Outreach. In general, the results indicate that women’s financial inclusion is a multidimensional concept that goes beyond banking services to include financial empowerment capabilities and socio-economic aspects. This article’s findings have significant implications for policymakers and financial service providers in fostering sustainable financial inclusion policies and strategies, particularly in relation to gender inequality.